How to appeal a sales tax audit or penalty in Alabama

In Alabama, the Department of Revenue will frequently audit business sales tax returns and may issue penalties or punishments for tardy filing, incorrect reporting, willful omissions, or other violations. Penalties can range from fines to revocation of your sales tax permit depending on the infraction.

Sales Tax Statute of Limitations in Alabama

In sales tax law, the "statute of limitations" is the maximum amount of time state authorities have to investigate and begin potential audit or prosecution related to a a filed Alabama sales tax return in the event of underpayment, incorrect reportings, etc. The Department of Revenue cannot begin an audit or issue a penalty after this timeframe.

The statute of limitations in Alabama is three years from the later of either the return filing date or the return due date. However, if the base is understated by greater than 25%, then three years from the later of the return due date or return filing date becomes six years.

Appealing to the Department of Revenue in Alabama

If you do not agree with a penalty or decision made by the Alabama Department of Revenue, you have the right to file an appeal and ask for reconsideration.
In the case of a department appeal, an official petition must be filed with the Department of Revenue, Administrative Law Division in the thirty days immediately after the date of submission of the assessment

Administrative Sales Tax Appeals in Alabama

Judicial Sales Tax Appeals in Alabama

If all other appeal avenues fail, businesses can make a final appeal in the state court system.
When working with judicial appeals, the suit must be filed with the Circuit Court within thirty days after the date of final assessment

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